Tuesday, March 23, 2010

How to explain the health care reform bill to your family and friends very very simply

Health care reform has passed. Now it's time to explain what it does.

Why is this so important? Because the public will like the bill once they find out what's in it. Republicans know it, and polling bears it out. It's therefore our job to get the word out to our family and friends - and in a way that's easy to understand.

So how do you explain a 2,000+ page bill in under two minutes? Easy.

First, ask the family member or friend if they think insurance companies should be able to revoke people's coverage when they get sick, or deny people coverage because they've got a preexisting condition.

They'll say "no." (If they say "yes," well, you're never going to persuade them).

Then you explain the bill like this:

"Well that's good, because that's the first thing the health care bill does, is ban those outrageous insurance company practices. In fact, there are really just five basic things the health care bill does:

"First, it bans insurance companies from revoking your coverage when you get sick, or denying you coverage because of preexisting conditions.

"Second, with those regulations in place, you've gotta make sure that people don't just wait around till they get sick before buying insurance - otherwise, insurance companies would all go out of business since only sick people would buy insurance. So the bill requires all Americans to buy health insurance - that's the 'individual mandate.'

"Third, if everyone has to buy insurance, you've gotta make sure people can actually afford it. So the bill provides subsidies to help low and middle income people afford insurance.

"Fourth, if the government is paying for people's insurance, you've gotta keep the insurance companies honest and force them to compete. And the bill does this by establishing 'exchanges' where you can shop around for insurance policies online. Insurance companies must post prices and customer satisfaction data to help you compare policies. Basically, the exchanges would be like the Target of health insurance. (See here for more info on the exchanges)

"Last, you've of course gotta pay for all this. And the bill does this with fees on medical device makers and other corporations that benefit from the bill, taxes on the most expensive "Cadillac" insurance plans, and reductions in Medicare fraud and waste. And the Congressional Budget Office actually found that this would reduce the deficit by over $100 billion over the next ten years.

"So really, the bill starts by preventing outrageous insurance company practices, and the rest is just necessary to make that first part work. It's a pretty moderate, common sense bill."

Framed this way, it's almost impossible to reject the bill. If you reject any piece of this, it means you're implicitly supporting insurance companies' ability to rescind coverage and deny on the basis of preexisting conditions, or you're supporting a system that will bankrupt the insurance industry and the federal government.

So again, the summary is:
  1. Insurance regulation: Bans insurance companies from revoking or denying coverage because you get sick.
  2. Individual mandate: Requires everyone to buy health insurance in order to prevent people from waiting till they get sick to buy insurance
  3. Subsidies: Provides subsidies to make sure everyone can afford to buy insurance
  4. Online exchanges: Establishes online exchanges where you can shop for insurance coverage, in order to promote competition and keep companies honest
  5. Paying for the bill: Pays for the subsidies with a combination of spending cuts and taxes on companies that benefit from reform

If you're really pressed for time, you can explain it as The Economist does in three sentences:

Under Barack Obama’s plan, which is bogged down in Congress [just passed], the private-insurance market would expand dramatically—but so would regulation. The proposal would require all Americans to buy cover. To make it affordable, the government would regulate products and prices and offer subsidies for the poor.

For a slightly more detailed explanation, see my post "The simplest explanation of health care reform you will ever read." And if you're really wanting more nitty gritty, go read Ezra Klein's blog.

Questions? Suggestions? Leave them in the comments.


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The simplest explanation of health care reform you will ever read

Health care reform in three sentences

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  1. Wow, I read up to the 4th "you've gotta" and had to stop reading... If you can't use proper grammar to get your point accross, then perhaps you shouldn't write. I can't possibly take someone seriously who feels it is appropriate to use that kind of terminology.

  2. Are you really so naive to think this will work? Do you really think when premium cost go through the roof because somebody has to pay for all these increased cost the insurance companies will face due to the fact they can't control their cost by selection? This will cost us all. All the money grabbing for votes in this bill is corruption at the core. This administration has created one money grab after another. The insurance companies have issues, but this bill isn't fixing them. The will of the American people was forgot, but it won't be in elections for years to come.

  3. Manderz - this was meant to be written like people talk. I've added quotes to make that more clear.

    Toddgleason - you say, "Do you really think when premium cost go through the roof because somebody has to pay for all these increased cost the insurance companies will face due to the fact they can't control their cost by selection? This will cost us all."

    First, premiums are increasing NOW, so this argument is a moot point.

    In any case, it's really an argument for single payer--it's exactly the reason free market health insurance is a poor way of getting people coverage, because the people who need it most can't get it. The hope with this bill is that competition through the exchanges, and regulations on the rates insurers can charge, will keep premiums down, forcing insurers to find more creative ways to control costs.

    What's your solution? Allow insurance companies to "select" only the people who will never need to use health insurance?

  4. Does toddgleason think that if auto insurance or fire insurance or life insurance companies premiums have gone through the roof because they can't cancel the policy when someone has an accident, a fire, or dies? What is with the Republican lack of logic?

  5. Being in the health care field for 20 years, I do see the need for coverage as the tax payers end up paying for those who can not pay their hospital bill in the end anyway. In retrospect, during my 50 years on this earth, I have never seen the government run anything successfully without costing way over the budget allowed on anything that has ever been proposed in my lifetime. The school system in the south is a prime example. If the money tax payers paid was used in a proper way, this issue would not be such a sore spot. The fact is the scholl system is full of waste and is very "top heavy". The funds never make it to the children after the trip though the red tape of government.
    A business is a process of profits and losses, investments and hard work. When a business has losses it has to make it up through increased sales, harder work, more stringent guidelines, etc. A TRUE BUSINESS can not stay alive unless it makes a profit or at least breaks even. The government uses "free money" as its capital, our hard earned money. It is not a profit/loss type of franchise! They can afford to lose and lose and lose...but unfortunately, in the process, our social security we worked so hard for and paid all of these years (without choice), our medicare benefits (which we had no choice about) our paychecks that we sweat many hours a week to bring home to keep our lights on and food in the fridge, are also expendable. It is this money the governemnt uses to run their "business". It is very easy for the government to spend money that does not belong to them....spending other's money is very easy!
    Private insurance and the health care system in America is in need of help, this I admit. I do not trust government to run this in a cost effective manner. How could I? Can someone name an undertaking the government has accocmplished in a cost effective manner? Social Security is broke and it is doubtful I will ever collect. Medicare was originally voluntary and is now basically a tax that comes out of our check and this fund is also broke like social security is! Not only do people pay medicare weekly out of their check for years, but if they do live to be old enough to retire, they still have to pay 100 dollars a month to get their benefits! The coverage is horrible, with no prescription coverage, and requires supplement plans that cost up to 150 dollars a month. The average elderly person pays 250 dollars a month if not subsidized for insurance after paying medicare for 40-5- years out of their paycheck.
    I am sorry, but the thought of the government running another fisco scare sme to death!

  6. The good news for anonymous there is that the bill just passed by Congress does not create a government insurance plan - private companies will still be providing most of the health insurance in America.

    But the notion that free markets lead to better outcomes in health insurance is just wrong. The profit motive does not create incentives to provide more coverage at lower cost: the incentive is to sell insurance only to healthy people who won't use it. See here:


    and here:


  7. Thanks - a very helpful summary. Much appreciated.

  8. Wow Manderz, your head can't get deeper than that?

  9. WAG and others don't get that this is a very complex subject and should take many years to develop (because if you did you would also ask for this to slow down to make sure we get it right). Very common for the government to implement their "good" intentions quickly without first developing a sound plan using all stakeholders and subject matter experts, which would reduce the cost of a trial and error model (How much money is wasted with this model?) Insurance products have been around a long time and there is enough expertise out there to get this done right (as long as we allow the appropirate amount of time to get it right). It would be irresponsible for this to be pushed through so quickly. Why is the concept of asking the government to do it but to do it correctly regardless of the delay in implementing it?